The balance sheet of the Algonquin Company reported assets of $50,000,liabilities of $22,000 and common stock of $15,000.Based on this information only,the amount or balance for retained earnings must be
A)$7,000
B)$57,000
C)$13,000
D)$87,000

Question

Quizplus · Accepted Answer

The total assets of the Algonquin Company are $50,000, which is made up of $22,000 in liabilities, $15,000 in common stock, and retained earnings. Therefore, to find the balance of retained earnings, we need to subtract the sum of liabilities and common stock from the total assets:
$50,000 - ($22,000 + $15,000) = $13,000. Hence, the correct answer is choice (C).

The Balance Sheet of the Algonquin Company Reported Assets of $50,000,liabilities